The Foreign Exchange market (also known as the Forex or FX market) is the largest financial market in the world, with average $5.1 trillion turnover per day. (Refer to the Bank of International Settlements (BIS) Triennial Central Bank Survey 2016).
The Forex market is larger than all stock (equity) and Treasury markets combined.
Unlike other financial markets such as stock, options and futures market that operate at a centralized location (eg, New York Stock Exchange), the worldwide Forex market has no central location. Forex market is a over the counter market where the trading take place on a global electronic network of banks, financial institutions and individual traders, all involved in the buying and selling of national currencies. Another unique feature of the Forex market is that it operates 24 hours a day. It is corresponding to the operation hours of respective financial centers in countries all across the world, starting each day in Sydney, then Tokyo, London and New York. At any point in time or location, there are buyers and sellers, making the Forex transactions and it is the most liquid market in the world.
In the past, access to the Forex market has been made available only to banks and other large financial institutions. With advancement in telecommunication and technology in recent year such as internet, the Forex market is now accessible to everybody, from banks to money managers to individual traders trading on retail accounts.
The time to get involved in this exciting Forex market has never been better than now. Open an account and become an active trader in the largest financial market in the world.
The Forex market is not different to any other type of market such as stock market, commodities market, weekend flea market. In Forex market, one currency (ie, home currency) is exchange for another country currency, For example if you are travelling to Germany on holiday , when you arrive at Germany you exchange your home currency USD to Euro (EUR), which you are effectively doing is Forex transactions.
Let say you have $1000 USD and bought Euros when the exchange rate was 1.10 US dollar to Eurosr. You would then have 909 Euros. If the value of Euros against the US dollar increased then you would sell (exchange) your Euros in exchange for dollars (USD) and have more dollars than you started with.
Example:
You might see the following:
EUR/USD last trade 1.1000 means
One Euro is worth $1.10 USD.
The first currency (in this example, the EUR/) is referred to as the base currency and the second currency (/USD) as the counter or quote currency.
The Forex plays a vital role in the global trade and there will always be a tremendous need for the exchange of currencies. As global trade increases the daily Forex trade volume will increase. As long as there is global trade, there will be a Forex market. The Forex market has to exist so as to facilitate country like Germany can sell products in the United States and be able to convert to Euros in exchange for US Dollar.
RISK WARNING:
Risks of currency trading
Margin trading is an extremely risky form of investment and is only suitable for individuals capable of handling the potential losses associate with margin trading. An account with an broker allows you to trade foreign currencies on a highly leveraged basis (some broker up to about 1,000 times your account equity).The funds or capital in an account that is trading at maximum leverage may be completely wipe out if the position(s) held in the account experiences even a one percent swing in value. Given the possibility of losing entire investment, trading in foreign exchange market should only be conducted with risk capital that is if a lost occur the trader has no significantly effect on their financial well-being.
One Euro is worth $1.10 USD.
The first currency (in this example, the EUR/) is referred to as the base currency and the second currency (/USD) as the counter or quote currency.
The Forex plays a vital role in the global trade and there will always be a tremendous need for the exchange of currencies. As global trade increases the daily Forex trade volume will increase. As long as there is global trade, there will be a Forex market. The Forex market has to exist so as to facilitate country like Germany can sell products in the United States and be able to convert to Euros in exchange for US Dollar.
RISK WARNING:
Risks of currency trading
Margin trading is an extremely risky form of investment and is only suitable for individuals capable of handling the potential losses associate with margin trading. An account with an broker allows you to trade foreign currencies on a highly leveraged basis (some broker up to about 1,000 times your account equity).The funds or capital in an account that is trading at maximum leverage may be completely wipe out if the position(s) held in the account experiences even a one percent swing in value. Given the possibility of losing entire investment, trading in foreign exchange market should only be conducted with risk capital that is if a lost occur the trader has no significantly effect on their financial well-being.
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